how much “house” can i afford with what i make/have?
December 15, 2008 · Print This Article
dawn c asked:
i’m a 1st time home buyer in my 30s and will be buying this on my own.I make about 60k a yr with 40k saved for a downpayment.I also have about 30k saved for “emergancies”.I don’t want to be “house poor” but would like a nice house.My question is what price range for houses should i be looking at?
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i’m a 1st time home buyer in my 30s and will be buying this on my own.I make about 60k a yr with 40k saved for a downpayment.I also have about 30k saved for “emergancies”.I don’t want to be “house poor” but would like a nice house.My question is what price range for houses should i be looking at?
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
Yahoo! actually has a pretty good article for you.
The old rule of thumb was that you take your monthly salary, and 33% should be devoted to debt repayment, mortgage, car loans, and credit card debt. Mortgage only should be 28% of your monthly. Lately, realtors have been suggesting a higher percentage, sometimes up to 38% total.
I think that’s too high, but that’s just me. Remember, however, that the 28% or 33% or whatever you choose to service the mortgage debt also must cover your property taxes and homeowners insurance, and if you don’t put enough down, private mortgage insurance.
Here’s another article you might want to review as well.
Keep in mind you have upkeep for the house as well, so you will want to budget for that too.
Best of luck.
The answer would be based on what other expenses you have, such as school loans, car loans, gas for a long commute, etc. But CNN has a good calculator that you can enter in your income, expenses, etc. to see what you can afford.
A rule of thumb, though, is that no more than half of your monthly net income (after taxes) should go toward your mortgage/property taxes.
Congratulations, you have successfully placed yourself among a select few who saved before buying a home.
With your salary, downpayment and savings, your home purchase only depends on you.
Check this site to determine how much of a mortgage you can afford.
Good luck.
3 times your annual salary, 3 X 60 = 180,000
Plus Down Payment 40K = 220,000
Save you emergency money for closing costs and emergencies.
Yes you can go get a more expensive house, and less money down, but This is the safe way, and you shouldn’t get yourself in trouble.